While some argue for destroying the terminal through which 90% of Iran’s oil exports flow, others caution of a global market ‘tailspin’
Kharg Island – through which 90% of Iran’s oil exports flow – is arguably the country’s most sensitive economic target but the export terminal has so far remained untouched throughout the US-Israel bombing campaign. Experts say bombing or capturing the site with US forces would be likely to cause a sustained increase to already surging oil prices, as it would amount to taking the entirety of Iran’s daily crude exports offline.
“We may see the $120 a barrel price we saw on Monday heading to the $150 if Kharg were attacked,” said Neil Quilliam, with the Chatham House thinktank. “It’s too vital for global energy markets”. Although the US has struck 5,000 targets in and around Iran, it has so far refrained from bombing the country’s oil infrastructure – though oil prices remain nearly $20 per barrel higher because the fear of Iranian retaliation has in effect closed the strait of Hormuz to tanker traffic.
Israel’s air force did strike two oil refineries and two depots on Saturday, plunging Tehran into what some residents described as an “apocalyptic” darkness as thick black smoke descended over the capital. But there have been no attacks since. Kharg, a five-mile-long coral island in the Persian Gulf 27 miles from the mainland, is where pipelines from Iran’s oilfields in the centre and the west of the country terminate. Established by a US oil conglomerate, Amoco, it was seized by Iran during the 1979 revolution.
While most of Iran’s coastline is silty and too shallow for very large crude tankers used by the oil industry, Kharg is sufficiently close to deep waters. Satellite imagery reveals vast loading jetties emerging from its eastern shore. Typically, between 1.3m and 1.6m barrels of oil a day pass through Kharg, though Iran increased volumes to 3m a day in mid-February, according to the investment bank JP Morgan, in anticipation of a US-led attack. A further 18m barrels are stored on Kharg as a backup, the bank added. (Ed note: This very important small island will be very big soon.) (Read More)
